Which of the Following Is True

question 70

Multiple Choice

Which of the following is true?

• A)None of these
• B)Commercial banks are the only legal type of financial intermediary.
• C)Banks are prohibited by law from earning a profit.
• D)It is customary to pay a higher interest rate on a loan than you would receive on your savings account from the same bank.
• E)A bank earns a profit by lending at a lower rate than it pays its depositors.

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Definitions:

Producer Surplus

Sum over all units produced by a firm of differences between the market price of a good and the marginal cost of production.

High Quality

A characteristic of products or services that meet or exceed the expectations of consumers, often associated with durability, reliability, and excellence.

Marginal Benefit

The additional benefit received from consuming one more unit of a good or service.

Marginal Social Cost

The additional cost to society as a whole from producing one more unit of a good or service, including both private costs and externalities.